FORMULAS

HIGH LOW METHOD

TO COMPUTE FOR FIXED COST:

Total Cost = (Variable rate per unit x Units) + Total Fix Cost

LEAST SQUARE METHOD

FORMULAS 1
 Sample problem #2
Woodman Company applies factory overhead on the basis of direct labor hours. Budget
and actual data for direct labor and overhead for the year are as follows:

Required: The applied factory overhead for the year

Formula:

Est. OH / Est. Base = Pre.det. OH rate x Actual base = applied OH

720,000 / 600,000 = 1.20 / hr x 550,000 hrs = P660,000 applied OH

FORMULAS 2